Aged care providers call for wealthy Australians to contribute more to save struggling sector

Pat Garcia

Aged care providers in Australia are urging the government to uncap daily fees for wealthier residents in order to save the struggling sector from financial collapse. Catholic Health Australia, Opal Healthcare, Anglicare Sydney, and Southern Cross Care (Qld) have raised concerns that the Basic Daily Fee, which is currently capped at 85 per cent of a single person’s basic pension or $58.98 per day, is inadequate to cover the rising costs of day-to-day services such as meals, cleaning, and laundry, particularly in light of the increased expenses incurred due to the Covid-19 pandemic.

With 70 per cent of residential aged care homes operating at a loss in the third quarter of 2022 and taxpayers bearing a growing portion of the financial burden of the aged care system, the providers are calling for urgent reforms to ensure the sustainability of the sector. They propose that the Basic Daily Fee cap be removed for self-funded retirees, but retained for aged pensioners as a safety net for those with low incomes.

The Basic Daily Fee was originally introduced and capped over 40 years ago in the 1980s as part of reforms to discourage nursing homes from admitting patients who could have been cared for in hostels. However, the aged care providers argue that the cap is outdated and prevents them from covering their costs in the current economic and social context.

Pat Garcia, CEO of Catholic Health Australia, stated that the current fee cap is not fit for purpose and is hindering providers from meeting their expenses. Rachel Argaman, CEO of Opal HealthCare, emphasized that if Australia wants to maintain a quality aged care system that can adequately care for all seniors, including those who can afford to pay more, it makes sense to ask wealthier residents to contribute more towards their care instead of burdening taxpayers further.

The aged care providers are advocating for a fairer and more equitable system that takes into account the actual costs of providing care in today’s context. They believe that the current cap on the Basic Daily Fee is economically unsustainable and no longer relevant. By uncapping the fee for wealthier residents while retaining the safety net for those with low incomes, the providers hope to create a more sustainable aged care system that can ensure dignified care for all Australians in need.


  1. I’m sorry but when did self-funded retirees become the “wealthy”? So this proposal is that that cohort pays an undefined amount more but I assume they will still receive exactly the same food and services as the capped grouping? Of course they will!
    If you have the financially capacity you already are paying a significant RAD and now the Provider wants to charge more.
    How unfair is this proposal? Extremely!
    I hope never to see this happen in my life time.

  2. This change in policy is a half truth as the sector well knows the Govt already means test self funded retirees who do not get a pension.
    I would be happy to pay the 15% higher fee but the Govt would have to eliminate the means test,which is just social engineering by stealth,and introduced by the liberal Govt when they altered the taper rate.
    Disgraceful Act.
    However the Aged care homes need to open there accounting books and show residents their expenditure .
    I can assure them there residents would be spending the money in a much more frugal but better outcomes results.
    These homes who have called for this policy are too weak to take on the Govt so they pick a small target in self funded retirees who are already getting slammed in the economy and the fees being paid to Aged care homes who are making a killing with the RAD 7%
    In my case an extra$20.000 more than when I signed.
    Also the RaD rooms have gone from $500,000.00 to 650,000.00
    And these homes publicise that the living partner is being helped thru grief.
    Give me a break.


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